Landlords, letting agents and charities urge the government to help renters clear Coronavirus (COVID-19) rent debts and stay in their homes

Posted 28 Aug 2020

As the ban on evictions ends in just over three weeks, six leading organisations representing tenants, landlords and letting agents have united to urge the government to provide financial help to private renters plunged into ‘Covid rent arrears’ through no fault of their own.

The coalition, which includes Shelter, the National Residential Landlords Association, ARLA Propertymark, Crisis, Citizens Advice and Generation Rent, is calling for a short-term package of emergency grants and loans worth £270 million to help renters who have lost out on income or been furloughed as a result of the pandemic. £270 million is just 0.013% of UK GDP.

The emergency fund would be limited to helping tenants pay off any unexpected rent arrears built up since the start of the pandemic in March. The coalition argues this would help both tenants to keep their homes, and landlords who rely on rental income for their livelihoods. It would also prevent rising homelessness adding to the current economic crisis.

Despite recent government efforts to increase housing benefit rates to cover the bottom third of private rents, thousands are still falling through the gaps in the welfare safety net. As new research carried out by Shelter and YouGov only last week shows, 322,000 adult private renters (4%) - who were not in arrears prior to the pandemic – have since fallen behind on their rent.

In a bid to avert a homelessness crisis, the coalition is urging the government to act with financial assistance provided in the form of:

  • Ring-fenced grants for renters already in receipt of government benefits or those who would otherwise be eligible for benefits but have no recourse to public funds - to be distributed by local councils.

  • Government-backed interest free loans for other tenants who can afford to pay them back, such as those who have been furloughed or are struggling to pay their rent now but will be able to in the future.

Polly Neate, chief executive of Shelter, said: “Ever since this pandemic gripped hold of the country, causing chaos for hundreds of thousands of renters, our services have been deluged with calls from worried families and workers plunged unexpectedly into debt. When the ban lifts, their ability to clear Covid-arrears will be critical if they are to stay safe in their homes.

“We simply cannot afford to lurch into another devastating homelessness crisis now that will ruin countless lives and undermine the country’s economic recovery. This one-off opportunity to provide emergency relief to those renters most in need must not be missed.”

Chris Norris, Policy Director for the National Residential Landlords Association, said: “Whilst the vast majority of landlords and tenants have been able to reach agreements where rent arrears have built, in some cases this has proved difficult. A financial package, such as that we propose today, would greatly assist tenants and landlords to achieve what we all want, namely to sustain tenancies.”

Timothy Douglas, Policy & Campaigns Manager ARLA Propertymark, said: “It is vital that the UK Government introduce emergency measures to support those in rent arrears brought about because of Covid-19 to ensure that tenancies are maintained, and we keep the rent flowing.”

Jon Sparkes, Crisis Chief Executive, said: “Every day through our services we’re hearing from people who are on the brink – trapped between mounting financial pressures and job insecurity brought on by the pandemic – and at risk of losing their homes unless further action is taken. By putting in place this vital financial support for renters struggling with arrears, the government has the opportunity to ensure that people can remain safe in their homes. Otherwise we risk countless people being swept into homelessness.”

Dame Gillian Guy, Chief Executive of Citizens Advice, said: “Renters’ incomes have been particularly badly hit by the coronavirus pandemic. Despite the extension to the pause on evictions, many may still face losing their home because of events they could not possibly have foreseen. The government needs to put in place dedicated financial support for tenants to help prevent increases in debt and homelessness. Such measures would also have a ripple effect, bolstering economic confidence.”


Alicia Kennedy, Director at Generation Rent, said: “The government must act to end the rent debt crisis and ensure no renter loses their home due to the economic impact of covid-19. Generation Rent hears daily from renters who have lost income due to the pandemic and are terrified of losing their homes. Grants would ensure renters struggling with rent debt will be able to stay safely in their homes this winter, while the country recovers from the economic shock of covid-19.”

ENDS

A landlord case study is available for interviews from the National Residential Landlords Association. Details below.

NRLA landlord case study: Sue Hall is a landlord in London. One of her tenants, a family, had to self-isolate due to coronavirus and fell behind on their rent as a result. Sue worked with her tenants to defer their rent for three months. To help cover the cost of doing this, Sue, who is a former mortgage adviser, used some of her own savings. She did not want to apply for the buy-to-let mortgage holiday in case this affected her credit rating as she plans to re-mortgage in September. Her tenants are now in a better financial situation. Sue supports the idea of a financial assistance scheme, which she says would greatly assist her tenants.

Notes to editors:

  • The calculation that at least 322,000 private renters have fallen into rent arrears since the start of the pandemic is an estimate of how many renters are in arrears now but weren’t in March 2020 – see table below. This is based on a YouGov survey of 3,698 England 18+ including 598 private renters in England, online, weighted to England adults, fieldwork 17 August to 19 August 2020.

  • Estimated equivalent numbers of people are calculated by Shelter using the survey results in conjunction with statistics from the English Housing Survey, MHCLG, 2018/19, the Census and ONS population estimates by single year. We estimate there to be 8.570 million adult private renters in England. Note this is a different figure to the number of households, which is referenced below, though both use the same survey statistic to calculate the number of people/households in arrears.

Private renters, England, weighted% in rent arrearsEstimated number of people in rent arrears
I am behind with rent payments/ in rent arrears [As at 17th August – 19th August, but was up to date with rent in Jan- March]3.76%322,265

Source: YouGov survey of 3,698 adults in England, including 598 private renters, online, 18+, weighted to be presentative of England’s adult population using official statistics, fieldwork 17th August – 19th August 2020. Estimated equivalent number of adult private renters is calculated by Shelter based on official statistics.

  • The value of the £270 million grants and loans package is based on the assumption that private renting households who have fallen into arrears since March 2020 require support to the value of an average of eight weeks’ worth rent arrears. Eight weeks’ worth of rent arrears are a mandatory ground for eviction.

  • The basis and sources for this calculation are referenced in the table below.

% of private renters in England who were in rent arrears in August 2020 but were not in arrears in January - March 2020 [1] Equivalent number of PRS households in England [2] Average private rent per week, England 2018/19 [3] Estimated total value of payment needed to cover an average of 8 weeks of unpaid rent for each of these households [4] Estimated arrears as a proportion of GDP [5]
3.8% 171,160 £200£273,856,0500.0139%

Sources: [1] YouGov survey of 3698 England 18+ including 598 private renters in England, online, weighted to England, August 2020; [2] English Housing Survey, MHCLG, 2018/19, Table AT 1.1, with [1] applied, estimated and rounded; [3] English Housing Survey, MHCLG, 2018/19, Table AT 1.3, [4] This is [2] multiplied by [3]. [5] UK GDP 2019, based on GDP quarterly national accounts time series, Office for National Statistics